Method for determining insurance benefits and premiums from dynamic credit information

ABSTRACT

The embodiments described herein are directed to a method of obtaining credit life insurance for an individual by means of a service organization. In detail, the steps include: registering the individual with the service organization via a computer system in a computer network; accessing credit information on the individual by means of the computer system in the computer network and determining the total debt of the individual; determining the amount of debt to be covered by credit life insurance benefits; creating a data base including insurance companies that provide credit life insurance benefits, the data base further including the premiums that the insurance companies charge for issuing their credit life insurance; selecting specific coverage with required specific premiums; obtaining the individual&#39;s approval of the required specific premiums via the computer system in the computer network; and obtaining credit life insurance benefits for the individual.

CROSS-REFERENCE TO RELATED APPLICATIONS

This application is a continuation of U.S. application Ser. No.12/117,275, filed May 8, 2008, which is a continuation-in-part of U.S.application Ser. No. 10/724,315, filed Nov. 26, 2003, which claims thebenefit of U.S. provisional application No. 60/429,951, filed Nov. 27,2002 each of which are incorporated by reference in their entireties.

FIELD

The embodiments described herein relate to the field of credit lifeinsurance benefits and, in particular, to an online (Internet) basedmethod of purchasing credit life insurance benefits.

DESCRIPTION OF THE RELATED ART

Typically, when an individual purchases goods, property, or services oncredit, the individual may also purchase a credit life insurancebenefits policy wherein the policy's premium is based upon the amount ofindebtedness incurred for that purchase. If the individual dies beforethe indebtedness is paid, the insurance company will pay the fullbalance then owed. Depending on the type of credit life insurancebenefits policy, if the individual is hospitalized or laid off from workbefore the indebtedness is paid, the insurance company will make theperiodic debt payments during the hospitalization or lay off from workperiod pursuant to the terms of the policy.

If the individual takes out a mortgage, the individual may purchasecredit life insurance to cover the mortgage payments. If the individualpurchases an automobile on credit, the individual may purchase creditlife insurance to cover the loan payments. If the individual purchasesfurniture or appliances on credit, the individual may purchase creditlife insurance on the loan payments. In some instances the individualmay purchase credit life insurance to cover the balance owed on certaincredit cards without regard to the nature of the purchases, whichcomprise the balance owed.

Each granting of credit can be covered by a separate credit lifeinsurance policy. In some cases the respective lender or credit grantorrequires the credit life insurance as a condition of making the loan orgranting the credit. In many cases, the credit life insurance is notfactually mandatory, but the individual is led to believe that creditlife insurance is mandatory and therefore purchases the insurance.Typically, the premiums for credit life insurance policies areastronomically high when compared to other life insurance policies.

In applicant's co-pending application Ser. No. 09/846,616 “CardManagement System and Method Therefore” filed on May 1, 2001, a cardmanagement system was disclosed and is herewith incorporated into thisapplication by reference. Embodiments of this application disclose amethod and system for online credit card and social card management,wherein the card is issued to an individual who is a card user by a cardissuing organization. The individual, using his own computer, interfacesthrough the Internet with a card management organization to a computersystem within the card management organization and requests certainactivities pertaining to his card such as: change of address, requestfor change in credit limit, dispute over a billing, etc. The computersystem includes a computer program that processes the individual'srequests pertaining to the individual's cards and informs the cardissuer and/or credit reporting bureaus of the individual's requests viathe Internet. The computer system thereafter informs the individual viathe Internet that the card issuer and/or credit-reporting bureau hasreceived the request.

These embodiments of co-pending application Ser. No. 09/846,616 allow anindividual to establish contact with credit grantors via the Internet.However it does not provide a means for obtaining the individual'scredit report, or for obtaining a consolidated report of theindividual's total indebtedness.

The embodiments described herein provide an online (Internet based)method for determining an individual's total indebtedness.

It is another object of the embodiments described herein to provide anonline (Internet based) method for purchasing credit life insurancebenefits consolidation services.

It is a further object of the embodiments described herein to provide amethod of allowing a card and/or a credit management organization or acredit watch or credit monitoring organization, which have a means toobtain credit information from credit reporting bureaus, to providecredit life insurance benefits consolidation services for an individual.

SUMMARY

The embodiments described herein are directed to a method of obtainingcredit life insurance benefits for an individual by means of a serviceorganization. In detail, the steps include:

1. Registering the individual with the service organization via acomputer system in a computer network. An additional accomplishmentduring registration is providing authorization to the serviceorganization by the individual to authorize a charge, and charge serviceorganization fees and credit life insurance premiums to the individual'svalid credit card.

2. Providing authorization to the service organization from theindividual to contact a credit reporting bureau to secure credit dataproviding the total debt of the individual. This step includes theaccessing of periodic credit balance (total indebtedness on the creditreport) information of the individual by means of the computer system inthe computer network and determining the total debt of the individualbased on the credit report.

3. Determining the amount of debt to be covered by credit life insurancebenefits.

4. Creating and periodically updating a data base identifying insurancecompanies that may provide credit life insurance, the data base furtherincluding the premiums that the insurance companies charge for issuingtheir credit life insurance policies;

5. Selecting a specific insurance company with required specificpremiums.

6. Obtaining the individuals approval of the required specific premiumsvia the computer system in the computer network.

7. Requesting that the insurance company underwrite the credit lifeinsurance benefits as determined by the collective selected indebtednessof all the individuals covered by the service organization for thatstate.

Upon application, the initial premium will be calculated from theselected debt balances on the credit report, and the selected creditcard charged. The step of accessing credit information of the individualby means of the computer system in the computer network and determiningany change in the total debt of the individual is periodically repeatedand the value of the premium owed by the individual is adjusted basedupon the change in total debt. Of course, the database is periodicallyupdated to include any new insurance companies and to update the chargesthat previously entered insurance company's charge for issuing theircredit life insurance.

The novel features which are believed to be characteristic of theembodiments described herein, both as to its organization and method ofoperation, together with further objects and advantages thereof, will bebetter understood from the accompanying drawings. It is to expresslyunderstood, however, that the drawings are for the purpose ofillustration and description only and are not intended as a definitionof the limits or scope of the embodiments described herein.

BRIEF DESCRIPTION OF THE DRAWINGS

FIG. 1A is a first part of an overall flow chart of the credit lifeinsurance benefits consolidation services organization's computerprogram. In particular, FIG. 1A is the flow chart for an individual tosubscribe to the service.

FIG. 1B is a second part of an overall flow chart of the credit lifeinsurance benefits consolidation services organization's computerprogram. In particular, FIG. 1B is the flow chart for the determinationof an individual's debt, determination of credit insurance benefitspremium and the storage of information in a database.

FIG. 1C is a third part of an overall flow chart of the credit lifeinsurance benefits consolidation services organization's computerprogram. In particular, FIG. 1C is the flow chart allowing an individualto view actions taken on behalf of the individual, to change orterminate coverage, etc.

FIG. 2 is a computer terminal screen for signing on to the program.

FIG. 3 is a computer terminal screen for registering personalinformation and providing billing information.

FIG. 4 is a computer terminal screen authorizing the serviceorganization to obtain the individual's total indebtedness from theircredit file provided by the credit bureau(s) and agreeing to accept theterms and conditions of the service and the credit life insurancebenefits.

FIG. 5 is a computer terminal screen for displaying current debtcoverage.

FIG. 6 is an Email message notifying the individual of a change in debtcoverage.

FIG. 7 is a computer terminal screen for displaying updated indebtednessinformation.

FIG. 8 is a computer terminal screen for accepting new credit lifeinsurance benefits

FIG. 9 is a computer terminal screen for displaying indebtednesshistory.

FIG. 10 is an email message for informing the individual that the creditcard designated during registration has insufficient funds to cover feesand or premiums.

FIG. 11 is a computer terminal screen for informing the individual thatthe credit life insurance benefits has lapsed and offering theindividual the opportunity to reregister for new credit life insurancebenefits.

FIG. 12 is an email message informing the individual that the creditlife insurance benefits have lapsed and providing instructions aboutreregistering for new credit life insurance benefits.

FIG. 13 is a computer terminal screen for updating billing informationfor the individual.

FIG. 14 is a computer terminal screen for the individual to cancel thecredit life insurance benefits.

DETAILED DESCRIPTION

The embodiments described herein cover an Internet online method whereinan individual using his own personal computer may register with aservice organization, which determines from the individual's creditreport all of the individual's credit life insurance benefits needs tobe covered under a single account premium. The amount will have afloating premium based upon the total indebtedness for the premiumperiod. The premium period, to be selected by the individual ordetermined by the service organization, which can be weekly, monthly orquarterly, or any other, agreed upon period of time.

Most credit life insurance companies will be unconcerned that the totalindebtedness is comprised of multiple items, because the premium isbased upon the total indebtedness during the premium period. Generally,the larger the total amount of indebtedness being covered by a singlecredit life insurance benefit policy, the smaller the premium per dollarof indebtedness. In other words, an individual can expect to pay asignificantly smaller premium for a single $10,000 policy than for ten$1,000 policies.

In detail, the method as illustrated in FIG. 1 is comprised of thefollowing steps which will be accomplished online (Internet) using theindividual's own personal computer in conjunction with the credit lifeinsurance consolidation service organization's computer and database.The credit life insurance service organization establishes a databaseconsisting of insurance companies that provide credit life insurance ineach state and the premiums the insurance company's charge for issuingtheir credit life insurance benefits. The information is stored in theDatabase indicated by numeral 20 in FIGS. 1A, 1B and 1C. The individualsaccount history (to be subsequently discussed) is also stored in thedatabase.

The individual calls up the web page and the screen shown in FIG. 2appears. The individual can log in or if not a member the individual cansubscribe by selecting Register, which brings them to the screen shownin FIG. 3. Once the individual registers they can select a password forfurther access to the individual's account. Thereafter, the followingsteps take place:

Step 22. Individual Registers—The Individual registers online with theservice organization. The registration includes the individual'spersonal information 22A as well as credit-card information 22B as maybe necessary to cover the service organization fees for servicing theindividual's credit life insurance benefits needs and to cover thepremiums for credit life insurance benefits. Note that the screen inFIG. 3 provides for entering a credit card number. This credit card willbe used to pay service organization's fees and any insurance premiums.

Step 24. Individual Accepts Terms of Service—Individual authorizes theservice organization to obtain the individual's Total IndebtednessCredit Report (TICR) from one or more credit reporting bureaus. The TICRmay also be required to delineate the various debts, which comprise theindividual's total indebtedness. The computer terminal screen for theindividual to authorize the service organization to obtain the necessaryinformation is shown in FIG. 4.

Step 26. Request Credit Information—The service organization requeststhe TICR from the credit reporting bureaus, indicated by numeral 27.

Step 28. Indebtedness Determined—Using the information received from theindividual's TICR, service organization determines the amount ofindebtedness, which should be insured.

Step 30. Determine Premium—Using the individual's state and total amountof insurable indebtedness as a basis, service organization refers to itsinsurance company data base and determines the insurer and premium forsingle credit life insurance benefits to cover all of the individual'sindebtedness during a pre-selected insurance period.

Step 32. Advise Individual—Service organization advises the individualof the appropriate premium for credit life insurance benefits to coverthe individual's total indebtedness as shown in FIG. 8.

Step 36. Individual Authorizes Policy—The individual authorizes serviceorganization to obtain selected amounts of credit life insurancebenefits and to charge the premium to the pre-designated credit card. Inthe event the individual desires more than the total amount ofindebtedness, the individual may elect to add certain clear categoriesof indebtedness i.e. home mortgage indebtedness is to be covered by thecredit life insurance benefits.

Step 38. Check Credit Card—In the event the individual's pre-designatedcredit card company advises service organization that the individual hasinsufficient credit available to cover the premium charge, the serviceorganization will immediately notify the individual and request analternative source of credit as shown in FIG. 10. If no acceptablecredit source becomes available, the credit life insurance benefitsaccount will be cancelled and the individual notified.

At this point the individual has obtained credit life insurancebenefits. Once the individual is initially covered there is an on-goingupdate program in operation. Referring to FIG. 1B

Step 40. Update Insurance Information—The insurance companies 41 areperiodically contacted to obtain latest credit insurance benefits andpremium changes.

Step 42. Update Credit Information—The credit reporting bureau(s) 27 areperiodically contacted to obtain updated credit reports to obtain TICR.

Step 44. Calculate New Indebtedness (TICR) Step 46. Determine NewPremium—Results added to database.

Step 48. Individual Periodically Billed—The individual's credit card isautomatically billed.

The individual is informed and the following information is stored inthe database 20:

Step 50. Insufficient Funds—The individual is notified via the Internetthat the credit card has reached its limit or otherwise will not acceptcharges. The E-mail message is provide in FIG. 10.

Step 52. Benefits Lapsed—The individual is notified via the Internetthat the benefits have lapsed for some reason. The E-mail message isshown in FIG. 12.

Step 54. Premium Change—The individual is notified via the Internet thatthe premium has changed due to a change in the TICR and/or creditinsurance benefit rates. The E-mail message is shown in FIG. 6.

Referring to FIG. 1C, the individual can log onto the web site via theInternet thereafter by pressing Log In Button 56 shown in FIG. 2,computer terminal screen. Thereafter:

Step 58. Summary of Account—The individual is presented with thecomputer terminal screen depicted in FIG. 7. By clicking on theappropriate button, the individual can bring up four separate screensfrom the database 20.

Step 60. Individual Cancels Insurance—The account is closed and theE-mail message shown in FIG. 14 is sent to the individual.

Step 62. View Details of Credit History—The computer terminal screenshown in FIG. 9 appears.

Step 64. View Details of Premium Details—The computer terminal screenshown in FIG. 6 appears.

Step 66. Billing Information Change—The computer terminal screen shownin FIG. 13 appears.

Credit life insurance benefits generally includes insurance benefits forthe individual in the event of one or more of the following, but are notlimited to: natural or accidental death, unemployment, layoff, medicalwithdrawal or hospitalization, dread disease or critical illness,dismemberment, short-term or long-term disability, natural disaster,etc. While only a few events for which the credit insurance benefitsprovide protection for are discussed above, one skilled in the art wouldknow that other types of events could be covered by the credit lifeinsurance benefits.

As shown in FIG. 5, the service organization also presents informationto the individual related to the debt of the individual and alsopresents information which classifies the debt into a plurality of debtcategories. This service organization also allows the individual toselect which of the plurality of debt categories the credit balanceinsurance benefits will be set to cover. These debt categories caninclude, but are not limited to: revolving loans, credit card debt,short-term loans, long-term loans, secured and unsecured real estateloans, mortgages, auto loans, payday loans and business loans. Whilethese are only a few of the debt categories that can be used, oneskilled in the art would know that any type of debt found in a creditreport could be classified and presented as a debt category.

At step 28, the amount of the individual's indebtedness which should beinsured, includes, but is not limited to, the total credit balance,portions of the total credit balance, monthly payments due or minimummonthly payments due. Therefore, at step 30, the service organizationdetermines the insurer and premium for credit life insurance benefits tocover the total credit balance or portions of the total credit balancesuch as periodic payments due (i.e., monthly payments) or minimumperiodic payments due (i.e., minimum monthly payments) and therebymaintain an individual's access to credit.

Thus it can be seen that the embodiments described herein allow anindividual to secure credit life insurance benefits. Furthermore, thebenefits are automatically increased or decreased periodically dependingupon the individual's total indebtedness. This protection continuesuntil the individual cancels the benefits or their credit card can nolonger accept charges.

The information obtained from the credit reporting bureau can come froma variety of sources including, but not limited to, credit reports andsummary reports. For example, in one embodiment, the informationobtained from the credit reporting bureau used to determine the amountof debt owed by the individual is taken from a summary report that doesnot include actual payment data.

While the embodiments herein have been described with reference to aparticular embodiment, it should be understood that the embodiment ismerely illustrative, as there are numerous variations and modifications,which may be made by those skilled in the art. Thus, the embodimentsdescribed herein are to be construed as being limited only by the spiritand scope of the appended claims.

1. A method comprising: using one or more computer processing units:obtaining authorization from an individual to contact and obtain creditinformation provided by one or more credit bureau; and on a periodicbasis: accessing credit information of the individual; determining anamount of debt owed by the individual based on the credit information;providing a user interface to the individual indicating the determinedamount of debt owed by the individual; accessing a data structurecomprising insurance company data corresponding to one or more insurancecompanies that provide insurance coverage, the data structure furthercomprising premium data corresponding to respective premiums that theone or more insurance companies charge for insurance coverage;determining how much of the amount of debt owed by the individual is tobe covered by insurance coverage, automatically selecting a specificinsurance company to provide insurance coverage for the determinedamount of debt over a predetermined time period; and calculating aninsurance premium required as payment to provide the insurance coverageby the specific insurance company.
 2. The method of claim 1, whereindetermining the amount of debt owed by the individual further comprisesclassifying the amount of debt owed by the individual into a pluralityof debt categories based on indications in the credit information oftypes of debts associated with respective debts in the creditinformation.
 3. The method of claim 2, wherein determining the amount ofdebt owed by the individual further comprises determining the amount ofdebt attributable to the credit card debt category and at least oneother debt category.
 4. The method of claim 1, wherein accessing thedata structure further comprises updating insurance company data toinclude new insurance companies, and further comprises updating thespecific premiums that the one or more insurance companies charge forproviding their aggregated insurance benefits.
 5. The method of claim 1,further comprising informing the individual, on a periodic basis, of theinsurance premium required as payment.
 6. Non-transitory computerstorage that comprises executable instructions to cause one or morecomputer processors to perform operations comprising: obtainingauthorization from an individual to contact and obtain dynamic creditinformation from a credit reporting bureau regarding the individual; ona periodic basis: accessing dynamic credit information of the individualfrom a credit reporting bureau and from the dynamic credit informationdetermining an amount of debt owed by the individual; providing a userinterface to the individual indicating the amount of debt owed by theindividual; determining how much of the amount of debt owed by theindividual is to be covered by aggregated insurance benefits,automatically selecting a specific insurance company to provide coveragefor the aggregated insurance benefits over a limited time periodassociated with the periodic basis; calculating an insurance premiumrequired as payment to provide the aggregated insurance benefitscoverage by the specific insurance company; and receiving anacknowledgement from the individual to purchase insurance from thespecific insurance company for the limited time period.
 7. Thenon-transitory computer storage of claim 6, further comprisingexecutable instructions to perform: determining the amount of debt owedby the individual further comprises classifying the amount of debt owedby the individual into a plurality of debt categories based onindications in the credit information of types of debts associated withrespective debts in the credit information.
 8. The non-transitorycomputer storage of claim 7, wherein determining the amount of debt owedby the individual further comprises determining the amount of debtattributable to the credit card debt category and at least one otherdebt category.
 9. The non-transitory computer storage of claim 6,wherein the amount of debt owed by the individual is a total debtamount, a periodic payment amount, or a minimum periodic payment amount.10. The non-transitory computer storage of claim 6, wherein the amountof debt owed by the individual is taken from a summary credit report.11. A computer-implemented system comprising: a computer processorconfigured to execute software code stored on a computer readable mediumin order to cause the computer-implemented system to: obtainauthorization from the individual to contact and obtain creditinformation from a credit reporting bureau; periodically access creditinformation of an individual from a credit reporting bureau; calculatethe total debt owed by the individual on each of a plurality of debtcategories, based on indications in the credit information of types ofdebts associated with respective debts in the credit information;receive an indication of whether or not to insure one or more of thedebt categories and determine how much debt owed by the individual is tobe covered by aggregated insurance benefits based on at least thereceived indication of whether or not to insure one or more debtcategories and the total debt associated with each debt category. 12.The computer-implemented system of claim 11, wherein the plurality ofdebt categories comprises two or more of the following debt categories:revolving loans, credit card debt, short-term loans, long-term loans,secured real estate loans, unsecured real estate loans, mortgages, autoloans, payday loans and business loans.
 13. The computer-implementedsystem of claim 11, wherein the total debt owed by the individual oneach of a plurality of debt categories is a total debt amount, aperiodic payment amount or a minimum periodic payment amount.
 14. Thecomputer-implemented system of claim 11, wherein insurance benefits forthe individual are provided in the event of one or more of thefollowing: natural or accidental death, unemployment, layoff, medicalwithdrawal or hospitalization, dread disease or critical illness,dismemberment, short-term or long-term disability, natural disaster. 15.The computer-implemented system of claim 11, wherein the informationobtained from the credit bureau used to calculate the total debt owed bythe individual on each of a plurality of debt categories is taken from asummary report.
 16. A method comprising: obtaining authorization from anindividual to obtain credit information from a credit reporting bureau;and using one or more computer processing units, on a periodic basis:accessing credit information of the individual from a credit reportingbureau; based on at least the credit information of the individual,determining an amount of debt owed by the individual; calculating thecategory specific amounts of debt owed by the individual in a pluralityof debt categories, based on indications in the credit information oftypes of debts associated with respective debts in the creditinformation; providing a user interface to the individual indicatingrespective amounts of debt owed by the individual in respective debtcategories; providing a user interface to the individual to selectcategory specific amounts of debt to be insured; and determining howmuch of the amount of debt owed by the individual is to be covered byaggregated insurance benefits based on whether or not debt categorieswere selected by the individual and the category specific amounts ofdebt associated with each debt category.
 17. The method of claim 16,wherein the amount of debt owed by the individual is a total debtamount, a periodic payment amount or a minimum periodic payment amount.18. The method of claim 16, wherein the periodic payment amount is amonthly payment amount and the minimum periodic payment amount is aminimum monthly payment amount.
 19. The method of claim 16, wherein theinformation obtained from the credit bureau used to determine the amountof debt owed by the individual is taken from a summary report.
 20. Themethod of claim 16, wherein the debt categories are selected from two ormore of the following debt categories: revolving loans, credit carddebt, short-term loans, long-term loans, secured real estate loans,unsecured real estate loans, mortgages, auto loans, payday loans andbusiness loans.